Rationing water and availability fluctuations. a theoretical discussion for the case of chile

Our work, presented here, is a theoretical discussion on alternatives to ration resource rights when it exceeds the actual availability. They are known as bankruptcy games. The work is the first part of a larger study on the problem, including development of primary information. In zones such as Arica, water is a scarce natural resource. It is available in limited quantities and often should be rationed due to hydrological cycles. Chilean law applicable to the problem is analyzed, the water code. The relative scarcity produces significant effects on productive activities and the restriction periods produce efficiency costs and adverse distributional effects. Rationing rules studied are equalitarian-, proportional, the same loss and the Talmud rule. The properties of alternative rationing rules are explained and analyzed axiomatically. Desirable criteria for -rationing rules are presented. We conclude that there is no unambiguously better rule and proposes a methodology for evaluating allocation rules in case of rationing.